An Exercise in Fiscal Evasion

Even when both sides found a way to agree on how to restrain spending, they found a way to disagree. House Speaker John Boehner, R-Ohio, had proposed to save money on entitlement spending, the biggest cause of budget bloat, by slightly modifying cost-of-living adjustments for Social Security (using a formula known as the "chained Consumer Price Index").

It wasn't the sort of change that would have impoverished seniors, since it would have shaved about a quarter of a percentage point off the annual increases. And the savings were modest: about $112 billion over 10 years, while yielding an additional $72 billion in revenue. Still, it was far better than nothing.

Many congressional Democrats denounced the suggestion, but Obama surprised everyone by agreeing, and House Minority Leader Nancy Pelosi said the change would amount to "a strengthening of Social Security." The deal was on.

And then it was off: Republicans abruptly changed their minds. Sen. John McCain of Arizona excused the reversal on the ground that "we can't win an argument that has Social Security for seniors versus taxes for the rich." Said Sen. Susan Collins of Maine, "There's a realization that in spite of the president's apparent endorsement of a chained CPI, that that proposal deserves more study."

In spite of Obama's endorsement? She meant because of it. Offering this money-saving change made Republicans look fiscally responsible, in contrast to the free-spending Obama. But actually enacting it was a political risk they were not willing to take.

Instead of forcing the president to accept new entitlement cuts as the price for raising taxes, Congress let him have his tax increase for free. Obama wasn't about to say no.

So here's the payoff for weeks of fear and anguish about the looming fiscal cliff: higher taxes, higher spending and a bigger debt. Funny how that worked out.